Full year results to 31 March 2023 PDF Free Download
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100%
Full year results
to 31 March 2023
Strong foundations, launching our new
growth strategy, Velocity
Dan Evans
Chief Executive
Presentation team
2
Paul Rayner
Chief Financial Officer
•Strong full year performance with continued revenue growth
•PBT1up 7% to £32.1m (FY22: £30.1m)
•EPS1up 24% to 5.25p (FY22: 4.24p)
•Strong free cash flow of £10.6m (FY22: outflow of £18.5m)
•Completion of £30m share buy back
•Net debt of £92.4m (FY22: £67.5m)
•Bank facilities of £180m extended by two years to July 2026
•Proposed final dividend of 1.80p per share
•Velocity strategy launched, focusing on revenue growth and margin improvement
•Target to be net zero business by 2040, 10 years before the government target
•Recent key contract wins and extensions, as well as strong pipeline, gives confidence in meeting
our expectations for the coming year
Highlights
1 Before amortisation and exceptional items
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Financial update
Paul Rayner, Chief Financial Officer
1 Before amortisation and exceptional items
FY23
£m
FY22
£m
% variance vs
FY22
Revenue 440.6 386.8 13.9%
EBITDA1103.7 99.3 4.4%
EBITDA1margin 23.5% 25.7% -
PBT132.1 30.1 6.6%
Free cash flow 10.6 (18.5) -
Net debt 92.4 67.5 -
Strong financial performance
•Mix of revenue impact on net margins
•Rate increases offset overhead growth
•EBITDA up 4.4% to £103.7m
•Strong performance from joint venture
•PBT up 6.6% to £32.1m
•Significant working capital improvement
has driven increased free cash flow
•Share buyback completed £24m
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FY23
£m
FY22
£m
% variance vs
FY22
Revenue
Hire
Services
441
258
176
387
243
138
13.9%
6.0%
27.4%
Gross profit 239 221 8.3%
Gross margin 54.3% 57.2% -
Overheads (205) (189) 8.9%
Operating profit134 33 4.6%
EBITDA1104 99 4.4%
Joint venture 73 -
Interest (9) (6) -
PBT132 30 6.6%
1 Before amortisation and exceptional items
P&L summary
•Continued revenue growth across hire and
services
•Rate increases to maintain total hire margin
•Mix of revenue reduced overall gross margin %
•Increased overheads of £17m
•People costs £7m
•Fuel and utilities £4m
•Vehicles £2m
•IT costs £2m
•Marketing and ESG £2m
•Excellent joint venture performance
•Interest increase resulting from higher
rates and buyback payments
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Customer and revenue analysis
•Regular pricing reviews and significant asset
investment delivered revenue growth
•Strong drive towards ECO product offering
•Hire revenue consistently strong and continues
to grow
Hire revenue analysis Price and volume analysis
•Volume influenced by macro-economic factors, positive
H2 positioning the business well for FY24
•National customers performing as expected
•Key focus on managed customers
•Trade and retail performing well and remains a group
targeted for growth
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National Managed Trade & Retail
Revenue
Rate
Volume
FY23
£m
FY22
£m
Share of after tax results 6.6 3.2
Cash flow 5.6 1.9
Investment on balance sheet 9.2 7.8
Joint venture
•Record performance following contract wins in FY22
•Cash backed profits
•Dividends received of £5m and loan repayments of £0.6m
•Quarterly operating meetings
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Adjusted profit bridge
1 Before amortisation and exceptional items
•Hire revenue increase and margin improvement following rate increases
•Depot overheads increased £13m - primarily pay increases £6m, fuel & utilities £4m and vehicles £3m
•Central overheads increased £4m - primarily pay increases £1m, marketing £1m and ESG £1m
9
FY23
£m
FY22
£m
Intangibles and JV 34.2 33.7
Hire fleet 207.9 226.9
Other assets 23.3 20.5
Working capital 30.1 20.2
Provisions (15.6) (14.9)
IFRS16 net liability (2.9) (2.5)
IFRS16 net liability (92.4) (67.5)
Net assets 184.6 216.4
Debtor days 61 67
Creditor days 37 56
Balance sheet summary
•Hire fleet
•Itemised £172m
•Non itemised £36m
•Strong working capital performance in H2 –improved
cash collections with refined controls
•Reassessed dilapidations provision, prior year net assets
adjustment of £10m
•Net debt of £92.4m
•Higher than FY22, principally completion of share
buyback of £24m
•Leverage 1.3x of EBITDA
•Significant headroom of £83.5m (FY22: £110.8m)
•Bank facilities of £180m extended by two years to July
2026
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Assets and controls
•Non-cash £20.4m write down of assets identified in February 2023
•Investigation into cause of loss launched and reported on 18 May 2023
•Key findings: Issue was control and accounting procedure based, not result of underlying systematic fraud
•Total number of non itemised assets c.1.9m, itemised assets c.0.3m
•New controls introduced
•Asset working group established to review and report on ongoing process and control improvements
•Perpetual counts in place
•Mandated bi-annual full stock take across whole of asset categories, next full stock count 30 September 2023
•Monthly fixed asset register reconciliation
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•Strong operating cash of £89m, 86% conversion from EBITDA consistent with FY22
•Working capital - fuel c.£5m, net debtor/ creditor movement c.£2.5m, balance provisions
•Significant improvement in debtor days facilitated a reduction in creditors
•Net capex £46m –gross capex of £64m and disposals of £18m
•Free cash flow of £11m
•Total returns to shareholders £35m
Cash flow bridge
12
FY23
£m
FY22
£m
% variance vs
FY22
Utilisation (itemised) 54.4% 57.0% (2.6pp)
ROCE 14.5% 13.6% 0.9pp
EPS15.25p 4.24p 24%
Dividend cover 2.0x 1.9x -
DPS 2.60p 2.20p 18%
Share buyback £24m £6m £18m
Leverage 1.3x 0.9x 0.4x
Key metrics and shareholder returns
1 Before amortisation and exceptional items
•Utilisation calculated on itemised assets
only
•Improved controls will support greater
detail on utilisation moving forward
•Strong EPS growth
•Progressive DPS
•Sensible leverage at 1.3x
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Business update
Dan Evans, Chief Executive
Business update
•Agreement reached with B&Q on exciting partnership evolution:
•Extended offering onto trade-point.co.uk and diy.com in 2023, exclusive to Speedy
•During FY24 extended coverage to digitally hire selected products in c.300 B&Q stores
nationally
•Delighted with the record year in our newly rebranded Customer Solutions business
•Fuel and energy business continues to grow:
•Supporting the diverse needs to our customers
•Core to our focus on product innovation
•Strategic collaboration established with Peak for the next 5 years:
•Focussing on artificial intelligence
•Optimisation and efficiency for Speedy
•Providing intelligence to support customer decision making
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Customers
•Key customer highlights:
•Significant pipeline of year 1-3 opportunities
•Business development resource aligned to key sectors
•Chief Executive visit to Kazakhstan joint venture during February 2023
•Over 120 customers made up of over 1,500 of their people visited the Speedy Innovation Centre in Milton Keynes
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People
•Investment in early and late careers
•Focus on internal promotions in the year, supporting our career line of sight
•ESG Director and HSSEQ Director promoted to Executive Team
•First female Managing Director
•Introduction of flexible working trials across the business
•Emerging Talent, Development Board established
•People First employee engagement survey, score of 77%
Health & Safety
•RIDDOR Accident Frequency Rate of 0.12 (FY22: 0.35)
•Lost time incidents down 41% on prior year
•ROSPA Gold achieved for 9th consecutive year
•EcoOnline reporting system fully embedded for hazard, near miss and positive
observation reporting
People and Health & Safety
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Accelerating Innovation
Continued investment in eco
technologies to meet customer
demand for Net Zero
Climate Solutions
First SBTi Net Zero by 2040
roadmap aligned to 1.5 °C
in UK Hire
Including Everyone
Delivering on our People
First strategy
Part of the Community
Delivering social value for our
people and communities
The Decade to Deliver - A Hire Revolution: Inspiring People to make Hire their First Choice
Industry leading ESG
Making hire even more
sustainable through investment
in eco technologies and
refurbishing and retrofitting assets
to become more circular
Net Zero and Nature Positive. 50%
carbon reduction in Scope 1 and 2
by 50% and Scope 3 by 42% by
2030 and Net Zero Carbon by
2040. Nature Positive by 2030
Top 100 employer –DEI,
wellbeing, family friendly,
talent, engagement,
sustainable supply chains
Supporting Local - charities,
community investment,
volunteering, supporting local
businesses (SME’s) jobs –social
value for people and communities
What we
have
achieved so
far;
Next steps;
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Velocity, our new growth strategy
Dan Evans, Chief Executive
Velocity - Our five year strategy for growth
•Velocity is a five year transformation and growth strategy
•There are two defined stages to drive sustainable long-term growth:
•Fully aligned to our vision ‘To inspire and innovate the future of hire and accelerate sustainable growth’
Enable growth
Deliver foundational improvements across
technology and operational efficiency
(years 1-3)
Deliver growth
Become the most efficient and
sustainable UK hire business
(years 1-5)
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We are building a digital and data led business to step change our efficiency and power our growth
We have mobilised a group-wide transformation programme to deliver the technical and operational
changes required to establish our future platform
Transforming Speedy
Our
network
Our
logistics
Our
assets
People Powered
People Powered
… powered by our people and partners
Digitally and data driven…
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Core hire
products
Specialist
products and
services
Our growth engines
Trade and
retail markets
A focus on niche products and services with
significant growth and margin opportunities
Grow our market share with all
customer segments across all
geographies trading as a multi
channel service offering
Grow trade and retail customers,
through conversion of sales into hire,
e-commerce opportunities and market
creation to a less focused area of hire
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People First
Aim to be a Top 100 employer by
2029 Our “Decade to deliver,”
encouraging people to make
hire their first choice
ESG
Easy to do business with
Digital
experience
Intuitive user systems with AI
driven technology to automate
process and enhance performance
Modern workplace
Strategic pillars
Foundational elements that will support everything we do to accelerate sustainable growth
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Summary and outlook
•Strong revenue growth
•Adjusted profit before tax up 7%
•Strong free cash flow including completion of share buyback
•Dividend up 18%
•Recent key contract wins and extensions, as well as strong pipeline, gives confidence in
meeting our expectations for the coming year
•We remain vigilant to the continuing challenges of the macro-economic climate
•Velocity strategy launched focusing on revenue growth and margin improvement
•Capital Markets Event to be held on 11 July 2023 at the Speedy Innovation Centre in Milton
Keynes
Summary and outlook
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Q&A
Appendices
Capital allocation policy
Policy
1 This metric excludes the impact of IFRS 16
Investments to better enable us to
serve our customers Regular dividend payments in
the range between 33% and
50% of adjusted EPS
Funds available for acquisition
with a focus on specialist hire
and complementary services
Committed to maintaining net
debt to EBITDA ratio in the region
of 1.5x1
Organic growth Paying dividends M&A
activity Efficient balance
sheet
28
FY23
£m
Asset impairment (20.4)
Other (1.4)
Restructuring costs (6.7)
Exceptional items (28.5)
Exceptional items
•Comprehensive count of all hire equipment
identified a £20.4m deficiency in non-itemised
assets
•£1.4m of professional fees to support the
review of controls and accounting procedures
•Operational efficiency review resulted in
restructuring costs and depot closure costs of
£6.7m
•No exceptional items in FY22
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The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been
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and reference purposes as at the date of the Presentation which does not purport to be comprehensive, nor offer any form of accounting,
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intent, belief or current expectations with respect to the Company`s businesses and operations, market conditions, results of operations
and financial condition, capital adequacy, specific provisions and risk management practices (together, “forward looking statements”). No
assurance that any matters in the forward looking statements are achievable can be made because they relate to future events and are
based on various assumptions made by the Company, which assumptions may not prove to be correct and/or are outside of the Company’s
control. The Company’s business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control
and, consequently, actual results may differ materially from those expressed or implied by any forward-looking statements and projections.
Nothing contained within this Presentation should be construed as a profit forecast or profit estimate. The Company does not undertake
any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the
date of this Presentation to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forward
looking statements, actual results may vary in a materially positive or negative manner. Past performance is not a reliable indication of
future performance and recipients should not place any reliance on any forward looking statements.
Disclaimer
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